iCloud storage vs terabyte storage on iphone

Because there is NO relationship between device storage and iCloud storage. When you got your Apple account, you were given 5 GB of storage for free. Once you've used that amount of storage, you need to pay for more storage if you want to backup your data to iCloud (which you should want to do). Once you're out of space in iCloud, backups cease and you run the risk of losing precious data, should something go wrong.

Read this to better understand --> What's the difference between device storage and iCloud storage? - Apple Support

Bottom line: If you need more space in Cloud, upgrade to an iCloud plan which accommodates your needs --> Buy iCloud+ or upgrade your current storage plan - Apple Support

Backing up your phone, and/or transferring data such as photos to other devices, is a lot easier if you have enough iCloud storage.

You can hook up your phone to your computer, and do manual backups to your computer, but you must remember to do those. If you are using iCloud backups, you can set the phone to automatically do those when it has external power, has a Wi-Fi connection to the Internet, and is locked. (Which basically describes the condition that a phone would normally be in if you leave it charging at home every night,)

For photo transfer, if you have enough iCloud space, you can use iCloud synchronization. Pictures that you take on your phone appear in the main ("system") Photos library on your Mac (assuming that it, too, uses iCloud Photos) – and vice versa. No cables needed. There are other ways to transfer photos (including importing them over cables, if you aren't using iCloud Photos), but they are generally less convenient.

Note that when it comes to photos, there are three "automatic" backup options:

• iCloud Photos
• Automatic iCloud backups that include photos.
• None (i.e., if something happens to your phone, including you forgetting your passcode, and you have not backed up your photos in some other way, they're gone)